AEMC Wholesale demand response mechanism draft determination

  • A couple in the kitchen cooking dinner

In August 2019 the National COSS Network wrote to the Australian Energy Market Commission  (AEMC) about wholesale demand response mechanism draft determination.

The network expressed support for the proposed change to the national electricity rules to enable third parties (demand response service providers)
to participate directly in the wholesale market as a substitute for generation, and to be paid for providing this type of wholesale demand response.

However, urged the AEMC to change the following two aspects of its decision:

1. The deferral of the commencement of the mechanism to July 2022.
With summer peak demand growth and aging coal fleet, the risk of blackouts and interventions
is too great to wait another three summers without bringing demand response into the market.
We understand that the Australian Energy Market Operator (AEMO) can make the necessary
changes for an earlier start. We concur with PIAC, Total Environment Centre, and The Australian
Institute that the mechanism should be brought forward as far as possible, within the
capabilities of AEMO.

2. The decision to exclude residential consumers while new consumer protections are considered.
As organisations that advocate on behalf of people experiencing poverty and disadvantage, we are attuned to concerns regarding consumer protections. However, we argue:

        • There are household demand response options which have no risk of affecting people’s quality of life – such as pool pumps and household batteries – that, if aggregated, could offer a lot of value to the market and households.
        • Australian Consumer Law already provides the key consumer protections people need for many demand response contracts – like pool pumps and household batteries. These loads could be part of the demand response market from day one.
        • The work on extending existing consumer protection arrangements to deal with more sensitive and complicated loads – such as air conditioners and electric vehicles – should be commenced as soon as possible.
        • Further, there is no reason why there can’t be comprehensive consultation for adequate protections in this space before the implementation date.
Download full letter here
12 August 2019 | Focus area: , , |Service type: |Cohort: